ROMNEY: I, of course, respond to the attacks that come. But, you
know, they say in politics, if you`re responding, you`re losing.

(END VIDEO CLIP)

SCHULTZ: Romney and his campaign had a lot of responding to do today.
"The Boston Globe" expanded on the reporting by "Talking Points Memo" and
"Mother Jones", only to find out that Mitt Romney was the top dog at Bain
Capital three years after he said he left.

According to the report, a Massachusetts financial disclosure form
Romney filed in 2003 clearly stated he owned 100 percent of Bain Capital in
2002. And Romney`s state financial disclosures indicate he earned at least
$100,000 as a Bain executive in 2001 and 2002, separate from his investment
earnings.

Now, the report also drops this bombshell, a Romney campaign official
who requested anonymity to discuss the SEC filings acknowledged that they
do not square with common sense.

Until now, Romney has protected himself politically from any Bain
business practices after he left the company.

Romney always says that he left the company in 1999, except for this
one time.

(BEGIN VIDEO CLIP)

ROMNEY: I worked at one company, Bain, for 25 years, and I left that
to go off and help save the Olympic Games.

(END VIDEO CLIP)

SCHULTZ: OK. Let`s see if we can do a little bit of math here
tonight on THE ED SHOW.

Mitt Romney started in Bain in 1977. Twenty-five years later, well,
doggone it, that takes us to 2002. According to Mitt Romney and his camp,
the candidate didn`t make any decisions for Bain after 1999. He only
benefited financially from them.

Well, his campaign spokeswoman, Andrea Saul released this statement
today. "Governor Romney left Bain Capital in February of 1999 to run the
Olympics and had no input on investments or management of the companies
after that point."

Another campaign aide told "Politico", "Romney wasn`t involved in any
investment decisions. He was on the SEC filings because he still was
technically the owner, but just hadn`t transferred owner ship to the other
partners."

Well, history paints a very different picture. David Corn of "Mother
Jones" uncovered a February 1999 "Boston Herald" report about Romney
leaving for the Olympics. Romney said he will stay on as part-timer with
Bain, providing input on investment and key personnel decisions.

Well, in July of 1999, Romney was identified as the boss in a Bain
press release about the departure of two executives. Bain capital CEO W. -
- Willard, that means -- Mitt Romney currently on part-time leave of
absence to head the Salt Lake City Olympic Committee for the 2002 Games."

Said, "While we will miss Geoff and Marc, we wish them well and look
forward to working with them as they build their new firm."

Well, Romney was on part-time leave for three years. All the while he
collected a paycheck and benefited from the company`s investments. Today,
Bain Capital -- Bain Capital is now in the mix. They explained this three-
year gap.

Why are they in the news all the sudden? Well, they said today, "Due
to the sudden nature of Mr. Romney`s departure, he remained the sole
stockholder for a time while formal owner ship was being documented and
transferred to the group of partners who took over management of the firm
in 1999."

Bain does not explain why it took three years to transfer management.
For three years Mitt Romney was legally liable as the CEO of Bain Capital.
Obama campaign staffers held a conference call with reporters to underscore
the seriousness of this discrepancy.

(BEGIN AUDIO CLIP)

STEPHANIE CUTTER, OBAMA CAMPAIGN: Either Mitt Romney, through his own
words and his own signature was misrepresenting his position at Bain to the
SEC, which is a felony -- or he was misrepresenting his position at Bain to
the American people to avoid responsibility for some of the consequences of
his investments. And if that`s the case, if he was lying to the American
people, then that`s a real character and trust issue that the American
people need to take seriously.

SEN. HARRY REID (D-NV), MAJORITY LEADER: He not only couldn`t be
confirmed as a cabinet secretary, he couldn`t be confirmed as dogcatcher,
because a dogcatcher at least fills out his income returns. And what`s the
long report we have in "The Boston Globe" today indicates that some -- as
one of his own employees said, it doesn`t make sense.

(END VIDEO CLIP)

SCHULTZ: Obama adviser David Axelrod retweeted an article from
"Business Insider" entitled "Sorry Mitt Romney, you can`t be chairman, CEO
and president of a company, and not be responsible for what it does."

Most people understand the buck stops with the boss. Does it at your
place? But it never seems to stop with Mitt Romney, does it?

Today, the Romney campaign kicked off an advertising glitch calling
President Obama a liar for the attacks on Romney`s time at Bain Capital.

(BEGIN VIDEO CLIP)

NARRATOR: When a president doesn`t tell the truth, how can we trust
him to lead? The Obama outsourcing attack: misleading, unfair, and untrue.

SCHULTZ: They are using just a rogue tactic there, and they are
attacking where they are weak.

But it was Romney who is not being honest about his Bain career. Mitt
Romney made a lot of money being in charge of a company and claiming that
he had no responsible at the same time.

Most people have responsibilities when they sign their names onto
things like employment documents. This is the latest secret Mitt Romney
hasn`t fully explained. He won`t explain his offshore finances. He won`t
release more than one tax return.

He claims -- in all of his claims, actually, about his business
contradict his legal filings with the Security Exchange Commission.

The rules that apply to, say you and me, they don`t seem to apply to
Mitt Romney whatsoever, do they?

It`s an issue of trust and it`s an issue of character. You be the
judge.

Get your cell phones out, I want to know what you think.

Tonight`s question: Would you ever hire someone who lied on their
resume? Text "A" for yes, text "B" for no to 622639. Or you can go to the
blog at Ed.MSNBC.com. We`ll the results for you in the poll later on in
the program.

I`m joined tonight by Benji Sarlin, political reporter for "Talking
Points Memo".

Benji, good to have you with us tonight. Great reporting.

Let`s cut right to it. Did Mitt Romney have any involvement in Bain
Capital between 1999 and 2002?

BENJI SARLIN, TALKING POINTS MEMO: Well, it depends on what you call
involvement. He was certainly involved in the sense that if you look at
dozens of SEC filings he`s listed as the sole stockholder, as the chairman
of the board, as the CEO. His principal occupation as late as mid 2001 is
listed as a managing director of the company.

In the sense of a day-to-day role, there`s not a lot of information.
It`s actually pretty vague. But it`s really a question of what you
consider responsibility here.

If the company that you are sole owner of and which there`s nothing
preventing you from checking in on or watching from a public distance or
visiting your old partners, if there`s nothing preventing you from checking
in on it, are you accountable for their decisions?

The Obama campaign says it just definitely yes, regardless of what his
day-to-day role was.

SCHULTZ: Well, the Obama campaign is saying yes because he would be
legally liable, would he not? As the head of the company, if they were to
have legal issues whatsoever, his name is on the paper. He`s on the
payroll. He`s taking profits from the company.

How can he not be connected legally?

SARLIN: Well, that`s certainly what they`re saying to the SEC in all
those files. That Romney is the owner. Romney is the CEO. Romney is the
chairman. The buck stops with him.

SCHULTZ: So his -- their argument at Bain, he was out doing the
Olympic thing. In fact, he was probably playing a little bit of golf along
the way. We didn`t have anything to do with the operations.

But on the paper he`s the man, correct?

SARLIN: That seems to be pretty much what they`re saying, yes.

SCHULTZ: All right. Benji, great reporting. Great to have you with
us tonight. Thanks so much.

Well, there`s a lot for you guys to talk about. You`re going right at
it. How do you respond to the Romney campaign`s defense of the candidate
today?

BEN LABOLT, OBAMA CAMPAIGN 2012: Well, you know, Mitt Romney is
holding himself to a double standard because he claims credit for jobs
created by these companies that Bain acquired during his tenure, jobs that
are created to date.

But he won`t accept responsibility for transactions that he was
involved with for companies that shipped jobs overseas and went bankrupt
with workers losing their jobs and their pensions and their health care
benefits.

And so he`s furiously tried to extract himself from these three years,
1999 through 2001. Now, he was CEO, chairman of the board, sole owner and
sole shareholder. We`re supposed to believe that he didn`t have any
involvement with any of these companies.

You know, a new report has emerged tonight in sworn testimony in 2002.
Romney said that he left Salt Lake to travel back to Massachusetts to
appear at board meetings.

And so the suggestion that he`s not involved in any of this, that he`s
legally responsible but not personally responsible simply isn`t credible.

SCHULTZ: OK. So this is a new piece of information. There`s a legal
document saying that he left the Games and went back to take care of
business with Bain?

LABOLT: Sworn testimony in 2002. Now, the Romney has campaign has
admitted that one of the companies where he appeared at the board meetings
was a company that had been acquired by Bain.

SCHULTZ: OK. The Romney campaign wants the president to apologize
for Stephanie Cutter`s remarks that you heard earlier we played on that
conference call about Mitt Romney either being a liar or a potential felon.
Will there be an apology?

LABOLT: There won`t be. You know, Mitt Romney has been telling
voters since he ran for office in Massachusetts that he left Bain in 1999
and "The Boston Globe" reported that wasn`t true. That was the first
response. Their second response seems be informing the "Drudge Report"
that suddenly there`s a new front-runner for their vice presidential
nominee.

SCHULTZ: Well, that tonight is being reported by Drudge, as you said,
that Condi Rice is now on the top of the short list. It almost seems as if
Mitt Romney and the Romney camp wants this story to go away really fast.

Will this intensify for Mitt Romney to be transparent about his
finances and release more of his taxes? I mean, how does he make this go
away?

LABOLT: Well, that`s how he could clear up these questions and answer
these questions. You know, his own father released 12 years worth of tax
returns. We know his tax returns are available. He provided John McCain
with 23 years worth of returns.

SCHULTZ: Yes.

LABOLT: When he was being vetted for vice president.

SCHULTZ: All right.

LABOLT: He won`t share those with the American people.

SCHULTZ: What about claims that the Obama campaign has lied regarding
Mitt Romney`s role at Bain?

LABOLT: Well, a couple of things. First of all, their response to
that today relied on the claim that Mitt Romney left Bain in 1999. We now
know that`s not true.

But in terms of the outsourcing claims generally, let`s look at
companies that were acquired by Bain during Romney`s tenure there. Modus
Media eliminated jobs in California and Washington state as it created them
in China. Stream International, took a look at call center sites around
the United States, determined not to create American jobs here --

SCHULTZ: So, here`s the key --

LABOLT: -- because wage costs were too high. They went to India
instead.

SCHULTZ: So here`s the key that I think you want the country to know,
is that Mitt Romney has been running around the country saying that he
knows how this economy works. He`s been running around the country telling
people that he can manage the economy a lot better than President Obama.
That he`s all about creating job.

Yet when he was at the helm of Bain Capital, and there`s discrepancy
on whether he was or wasn`t, you`re saying that he was shipping jobs
overseas.

LABOLT: That`s exactly right and this has run throughout his career.
In Massachusetts, he vetoed legislation that would have prevented
outsourcing, while the president is fighting to end tax breaks for
companies that shift jobs overseas.

The tax plan he has on the table has additional incentives in it for
companies to outsource.

SCHULTZ: All right. Well, there will be judgment day coming up in
November.

Ben LaBolt, good to have you with us tonight. Thanks so much.

LABOLT: Thanks, Ed.

SCHULTZ: Remember to answer tonight`s question there at the bottom of
the screen. Share your thoughts on Twitter @EdShow, and on Facebook. We
always want to know what you think.

Another day, another big story about Romney`s financial stake in
outsourcing American jobs.

The latest involves a company which thrived on outsourcing. It`s
called Global Tech Appliances, and it`s based in Hong Kong. Mitt Romney
invested in two different ways. Through a subsidiary of Bain Capital and
through an offshore company called Sankaty Limited.

Here`s the map. From 1998 until 1999, Romney`s share in Global Tech
ranged from 6 percent to 10 percent, according to "Mother Jones". So his
money, his investment, was flowing to Hong Kong company Global Tech.
Global Tech manufactured household appliances in China.

And there`s a reason we show American jobs flowing to China. See, the
company relied on outsourcing by American companies to fuel its business.

Here`s what Global Tech`s CEO said back in 1998. "Although it appears
that customers such as Sunbeam are not outsourcing their manufacturing as
quickly as we had anticipated, we still believe that the long-term trend
toward outsourcing will continue." The company`s success relied on
American companies` desire to outsource, and Mitt Romney -- well, he was
happy to invest his money. Bear in mind, this is just a small part of Mitt
Romney`s outsourcing and offshoring problem. Romney says he will create
American jobs.

(BEGIN VIDEO CLIP)

ROMNEY: If I`m president, job one for me will be creating jobs. Let
me say that again. My agenda is not to put in place a series of policies
that get me a lot of attention and applause. My policy will be, number
one, create jobs for the American people. I do not have a hidden agenda.

(END VIDEO CLIP)

SCHULTZ: But that`s now he did it in the private sector.

Let`s turn to Ohio senator, Sherrod Brown.

Senator, good to have you with us tonight.

SEN. SHERROD BROWN (D), OHIO: Good to be with you, Ed.

SCHULTZ: Mitt Romney`s years as a businessman were no stranger to
outsourcing. I mean, is this going to be the key for Democrats across the
country when you start talking about creating jobs, working this angle
against him?

BROWN: Well, I`ve been working on this for years, and I -- you know,
we`ve got a number of American businesses and large corporations have
followed this sort of model, I think, in my mind unbeknownst to human
history before this, unknown to human history before this -- where they
shut down production in Steubenville, or Cleveland or Toledo, and they move
it to Wuhan (ph) or Xian (ph) or Beijing and sell the products back in the
United States. That`s what I think the American people are waking up to
that. They see a presidential candidate that has basically done his job
that way.

In many ways that`s what this Olympic story is about with our
athletes. If the awards were given out for breaking trade laws, China
would get the gold medal, and that`s what we`re seeing with all the
outsourcing and all the trade agreements and all that far too many people,
the elite in this country have done to the middle class.

SCHULTZ: Yes.

BROWN: It`s really an ultimate betrayal of our country and the middle
class.

SCHULTZ: You think Mitt Romney betrayed the American economy?

BROWN: Well, I think he`s part of a group of business people who saw
the best way to do business was shut down production here and move it
abroad, sell back into -- make it there and sell back to the United States.
You can avoid labor laws, you can pay lower wages, you can evade
environmental and worker safety rules.

SCHULTZ: Yes.

BROWN: And the bottom line gets better.

And, you know, I think that again, back to this Olympic Committee
thing, I think, my guess is I don`t know the people of the U.S. Olympic
Committee, but my guess is they are a bunch of business people who think
nothing of outsourcing because it pads their bottom line and their work
lives, ion their personal businesses and their profession. Why not do it
with the Olympic Committee, too?

SCHULTZ: You`re talking about the uniforms for the Olympic team.

BROWN: I`m talking about -- yes, this company in Cleveland, a company
with, I think 300 workers. I`ve been to this the plant several times. In
it`s in the Brooklyn section of Cleveland, old Brooklyn and they --

BROWN: I don`t know. Because the U.S. Olympic -- I think again
because the U.S. Olympic Committee thinks like much of the elite CEOs of
the big, big companies in this country that outsource. And the way they
think is move it offshore, pad the bottom line, makes sense to me --

(CROSSTALK)

SCHULTZ: This has caused quite a stir on the Hill, hasn`t it?

BROWN: It`s caused quite a stir. The American people understand this
intuitively. When we do stuff like this, it means we lay off teachers in
communities where there are plant closings and firefighters. It means
families break apart sometimes because everything falls apart for them. It
means kids can`t go to college.

SCHULTZ: Well, there`s one other subject I want to bring up with you,
Senator. Today, Senate Republicans filibustered a bill giving small
businesses a tax break.

Now, you consider all this talk from the Republican side of the world
about how they are for small business and they are the job creators. You
can`t raise taxes on the small businesses, yet they passed on an
opportunity to help small business. Did they not?

BROWN: Yes. Well, it goes back -- you know what it is, Ed. Mitch
McConnell made the statement a number of times that his number one goal for
the last two years has been to make sure that Barack Obama is not
reelected. This is part of the game plan today.

This actually -- if we had done this, it might have been a feather in
Barack Obama`s cap.

That`s the games they`re playing. They did it with the highway bill.
They did it with the debt ceiling. They`re doing it with all kinds of jobs
bills. It`s outrageous.

SCHULTZ: Senator, good to have you with us. Sherrod Brown of Ohio on
THE ED SHOW -- thank you so much.

BROWN: Thanks.

SCHULTZ: Mitt Romney gets caught in yet another lie. It mean, it
just keeps on coming. See what it is next.

And the GOP keeps on lying about President Obama and taxes. Former
Governor Ed Rendell, Joy Reid, and Susan DelPercio weigh in on the big
panel.

Stay with us. We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: This is not a syndicated show to tell the truth. But every
time we do a story about Mitt Romney, I feel like it is.

Mitt Romney has been caught in yet another lie. Last night on this
program, NAACP senior vice president for advocacy Hilary Shelton told me
that the Romney campaign brought in black conservatives to support Romney
as he addressed the NAACP convention.

(BEGIN VIDEO CLIP)

SHELTON: The campaign actually gave me a list of African-American
VIPs that they brought into the NAACP meeting. They`re bringing people in
that they know will support his agenda from other places that aren`t active
with the NAACP. These are people brought in to provide for him so there
will be some support along those lines.

The Romney campaign has not responded. Meanwhile, at a Montana fund-
raiser last night, Romney bragged about getting booed by the NAACP crowd.
"|If they want more stuff from the government, tell them to go vote for the
other guy -- more free stuff. But don`t forget, nothing is really free."

Even if Romney had no intention whatsoever of race baiting or stirring
up the welfare queen stereotype, this is part of a pattern.

Romney delivered the same message of no free stuff to Latino leaders
last month, and here`s what he told a woman who asked him about access to
contraception.

(BEGIN VIDEO CLIP)

ROMNEY: If you`re looking for free stuff you don`t have to pay for,
vote for the other guy. That`s what he`s all about, OK? That`s not --
that`s not what I`m about.

(END VIDEO CLIP)

SCHULTZ: No, Mitt Romney is about more corporate tax loopholes. More
tax breaks for the wealthy. Less regulation. You see, in Mitt Romney`s
book demanding affordable health care is free loading, demanding more
corporate welfare. That`s patriotism.

Let`s bring in Karen Finney, MSNBC political analyst and former
communications director for the DNC. How insulting, or is this insulting,
what you just heard from Mitt Romney? No free stuff. Go vote for the
other guy.

KAREN FINNEY, MSNBC POLITICAL ANALYST: It`s stunningly insulting.
And it`s not just insulting as a person of color or a woman as you pointed
out, but it`s insulting. I mean, I was a middle class kid. You know, my
parents worked really hard, and thank God for the benefits of this country
and the middle class dream, they sent their kid to college, and you know,
we`ve all had great lives.

And for Mitt Romney to insult working class people like that, I mean,
it makes it all the more clear that essentially going to the NAACP was
about a punch line for a fund-raiser. It was not about actually building a
bridge or reaching out. And it also shows - I mean, that is so classic to
say, you know, they. Who are they? That`s not America.

SCHULTZ: Well, he claims that he spoke with black leaders, leaving
the impression that they were NAACP leaders. Only to find out that they
were flown in, brought in by the campaign. This is so deceiving. So
cunning, isn`t it? I mean, what does it say about his character?

FINNEY: It`s very deceptive. And again, it`s a very cynical move,
Ed. I mean it`s the kind of thing, you know, OK, you know, in campaigns
people sometimes stack the crowd, right. But in this instance, I mean, to
do that and then to, you know, brag after the fact about, well I thought I
would get booed, and you know, no free stuff.

I mean, you know, again, it also shows, Ed, just such a lack of
understanding about what it is to be a low-income person or a middle-income
person in the country and the work. I mean, this is a real insult to
working people and I hope that independent voters are paying close
attention to the language.

And you know, these guys turn around and try to say that President
Obama is the most divisive guy. Are you kidding me? You know, anybody who
is talking about "they" and free stuff and putting people into different
classes clearly doesn`t get what America is about.

SCHULTZ: Vice president Joe Biden spoke before the NAACP convention
today and addressed the voting rights and voter suppression issue. Here it
is.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Did you think we
would be fighting these battles again? The president and I and Eric and
all of us, we see a future where the rights are expanded, not diminished,
where racial profiling is a thing of the past. Where access to the ballot
is expanded and not encumbered .

(END VIDEO CLIP)

SCHULTZ: I mean, I just don`t think Democrats across the country can
talk about this enough, Karen.

SCHULTZ: I mean, and I think it goes beyond whether you`re striking
the right tones. You have to make sure people are hearing this.

FINNEY: That`s absolutely right. I mean, we know that, you know,
what they say five million people are going to be disenfranchised off the
top. I think those numbers are growing as we speak. So we can`t -- you`re
right. We can`t talk about this enough. And it`s so important that people
find out what are the requirements in your state and get out there and make
sure you`ve taken care of it.

I thought Joe Biden knocked it out of the park, by the way. I mean,
he gave a great speech. It was personal. It was visionary. I mean, it
was exactly, frankly, what Romney should have done. Tell us what`s in your
heart and share your vision. And that`s what Biden did.

SCHULTZ: Well, he kind a got booed too when he told him he was going
to wrap up his speech.

FINNEY: I know. I love that. I love that. Bu you know, also Biden
did a great job laying out the Obama record. I hope every Democrat takes a
look at the speech, because that, you know, that was a great speech.

SCHULTZ: Karen Finney, great to have you with us. Thanks so much.

Lots more coming up in the next half hour of "the Ed Show". Stay
tuned.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This president, his response to everything is we
need to raise taxes.

SCHULTZ: Republicans continue to push the greatest lie ever told.
I`ll set them straight with the big panel next.

"The Baltimore sun" has a problem with "the Ed Show" and independent
voters. I`ll correct the records tonight.

UNIDENTIFIED MALE: Sometimes you have to make tough decisions, and
sometimes you have to work around the system.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ED GILLESPIE, ROMNEY SENIOR ADVISER: This president, you know, his
response to everything is we need to raise taxes.

(END VIDEO CLIP)

SCHULTZ: I mean, this is like an ESPN moment. Come on, man. I mean,
the lies from the Romney camp just continue. Romney`s senior adviser, Ed
Gillespie, there he is out there again. He wants you to believe that the
president of the United States is a classic tax and spend liberal.

But the facts tell a different story. Taxes are at a 30-year low.
This chart with figures for the congressional budget office show taxes are
lower now than they were under the four previous presidents. Ronald
Reagan, George H. W. Bush, Bill Clinton and George Bush.

Now, I want you to like us on facebook by going to
facebook.com/edshow. And Susan Del Percio, I want you to send this chart
to all of your conservative friends. I`m not picking on you. I`m asking
you to do me a favor. Send this chart to all your conservative friends out
there that thinks President Obama has raised taxes.

I tell you what, I give the conservatives credit, because they won`t
give up on telling this to the American people. They`re pretty dogmatic
about it.

I wasn`t picking on you. You know that. But it is true. Why do the
Republicans keep saying that?

SUSAN DEL PERCIO, REPUBLICAN STRATEGIST: Well, are you saying that
facts and politics are supposed to go together.

SCHULTZ: Kind a.

PERCIO: That doesn`t happen in politics. And, the message that
they`re using is in fact, when you look at -- and we can get into a big
debate about this with the health care ruling. It is deemed a tax. There
are issues there. And the solutions which Republicans are saying
absolutely raising no taxes. And the Democrats are saying, well, we`re not
going to cut spending.

Well, that`s how you get into the situations. And frankly, the word
compromise has become a dirty word, and we have to go back to something
like Simpson-Bowles, and the Republicans will use things like all the
Democrats want to do is tax. And the Democrats are going to call
Republicans evil.

SCHULTZ: Joy, is that play?

JOY REID, MANAGING EDITOR, THEGRIO.COM: Well, I mean, the problem is
first of all, you know technically, the affordable care act is -- the
mandate is, you know, is constitutional and the taxing authorities is
really not a tax. The penalty we could get into a whole argument about
that.

REID: Well, I mean, the problem is for the Republicans this time in
trying to use a tax argument is every poll shows the majority of Americans
agreed with Barack Obama`s prescription on taxes. Meaning, wealthier
Americans should pay more. So, they`ve already lost the tax argument. So
trying to go back to the sort of `90s, `80s strategy of tax and spend
liberals isn`t going to work because that`s not where Americans are now.

SCHULTZ: Ed?

ED RENDELL (D), FORMER GOVERNOR, PENNSYLVANIA: I`m not so sure that
Joy is right. I think that because they lie consistently and say it over
and over again, I think it has a tendency to take hold. Susan didn`t lie.
And she did an artful job of answering your question. But she forgot to
mention that the tax, the Supreme Court said was a tax affects less than
one percent of Americans. And only they only get taxed if they don`t sign
up for health care. It`s a minute little tax that has no implications for
people already have healthcare.

(CROSSTALK)

RENDELL: But in second, it`s hasn`t taxes, Ed. He has cut taxes on
the average American family by $3,600.

SCHULTZ: You never hear that listening to Obama.

RENDELL: Two tax cuts. In the stimulus, making work pay cut and the
payroll deduction tax cut. If you`re an average working family that makes
$75,000 under Barack Obama, your federal taxes have gone down $3,600. How
dare they say (INAUDIBLE).

REID: And taxes are not what people are principally voting on in the
election. Taxes, if you go through and ask people what are the most
important issues in the economy. It isn`t spending. It is jobs and the
economy which by the way, Romney is not even talking about because he is so
busy defending himself on Bain.

PERCIO: When the president came out saying he wants to seek a tax
increase on those making 250,00 $250,00 $250,000.

REID: That`s not a tax increase. It`s ending a tax cut.

PERCIO: Everybody, politically across the board, liberals to
conservatives and everyone in between says it`s a complete political act.
And guess what, I agree with that. The president thinks -- the president`s
team thinks that`s the way to win the election.

SCHULTZ: But the law is going to sense that at the end of this year,
so, he`s trying to extend it for 98 percent of Americans.

PERCIO: And he just happened to do it right now. This is the way, I
mean, --

RENDELL: He`s been talking about that for awhile.

(CROSSTALK)

PERCIO: The point is that it was very political.

REID: It`s time for it to expire. Wait a minute. Republicans can
come to this the table, and everyone agrees, right, that the Bush tax cuts
for people who make less than $250,000 a year should be extended. Everyone
agrees on that. So, Republicans just agreed to that. They won`t because -
-

SCHULTZ: But didn`t the president -- didn`t the president and the
Democrats give the Republicans what they wanted in the lame duck session of
the Congress when they hit a two-year extension of the Bush tax cut?

RENDELL: Sure.

SCHULTZ: So obviously it`s going to be another issue. So why not
agree on extending it right now?

PERCIO: So, shouldn`t the president own the tax cuts by now and say
some instead of saying the Bush tax cuts are his and that he should take
full responsibility?

SCHULTZ: He`s willing to take responsibility for it. Because he is
willing to go with the majority of Americans who want the taxes raised on
the top two percent.

PERCIO: But, no. They always go back to saying it`s the Bush tax
cuts. As if, that`s something that - so, he can always go back and blame
his predecessors.

REID: But this isn`t - can I ask you a question because here`s the
thing. What is the proactive justification giving people who make millions
and millions of dollars a year an additional tax cuts. We are talking
about trillions of dollars of ways, if you want to talk about cutting
government spending, why are we spending trillions of dollars to give tax
cuts to 400,000 families?

PERCIO: Here is the biggest problem that people have to make a lot of
money. And by the way, we`re talking over $250,000 here in New York that
the policemen and the nurse with over time. We`re not talking a lot of
money for those folks. It`s still $250,000. Besides, there are other
Democratic senators who happen to agree that number is too low.

But here`s the biggest problem. If you went to the wealthiest
Americans and say I`m going to use your tax dollars for this. Not for just
throwing it in the general fund, but for specific things, people would be
more likely to do it. The fact is when you see government - when you see
the stuff that happened at general services --

SCHULTZ: Susan, it`s never worked like that. And it`s never going to
work like that.

RENDELL: And let`s be clear. The president wants to use that money
to reduce the deficit. It will reduce the deficit by $863 billion.

SCHULTZ: He offered big cuts and the Republicans walked from it.

RENDELL: But I think the most important thing, Ed, to realize, is
that even on this issue the Republicans continue to mislead the American
people. First of all, it`s not a tax cut on someone who earns $260,000.
They don`t increase taxes on the $260,000 of income. It`s only on the
income over 250. So that couple who makes $260,000 only pays an increase
in taxes on 10,000.

SCHULTZ: On 10 grand, that`s right.

PERCIO: That`s $350 that I guarantee you a family in New York city,
like I said, who has limited means because that`s all it is when you are
living in --

SCHULTZ: What does the country want, though? The country wants low
taxes. The president is trying to deliver it to them. He`s also trying to
deliver the populous view that the top two percent need to do a little bit
more. Go back to the old rates. It`s not as if we have haven`t been there
before.

REID: If they were sincere, they would open some symbolic. He had a
commission. He threw it. He put it in --

(CROSSTALK)

SCHULTZ: Joy Reid, Ed Rendell, and Susan Del Percio, great panel.
Great to have you with us tonight. Thanks so much.

Coming up, a Maryland newspaper says "the Ed Show." Is it a great
place to reach independent voters, oh, am I going to set them straight
after this. Stay with us.

You know, the only theory you don`t get into an argument with somebody
who buys ink by the barrel. Well, maybe "the Baltimore sun" does that.
But, they wrote the Schultz show isn`t a great place to reach the middle of
the road or independent voters Obama needs in November, really?

I respectfully disagree with the sun`s assessment. And recent poll
numbers help me make the case. Let`s take a look at what Americans think
is main stream. What`s main stream? Well, 55 percent of Americans support
the president`s new immigration policy, 62 percent think the wealthiest
Americans aren`t paying their fair share in taxes, 70 percent of voters are
against cutting Social Security, 72 percent are against cutting Medicare,
59 percent are against cutting Medicaid.

I mean, I could take subject after subject and go on. But I`m running
out of time here, folks.

I don`t understand how the sun can make the case that I`m not main
stream. How does the middle of the road America feel when their job is
shipped overseas? All the things we talk about on the show. How does the
middle of the road American feel about when they get sick and can`t afford
to make their health care bill?

Helping millions of Americans, right? The majority of Americans like
the healthcare bill. How does the middle of the road or independent voter
feel about Mitt Romney hiding his money offshore to avoid paying taxes? I
mean, the position that I think, and I know I take on this show are
mainstream and populous.

But for some reason, the rest of the media sometimes likes to just
paint me as a wild eyed lefty. I kind of like that, too. It goes beyond
politics on the show. It`s about social issues and we addressed them. I
fight for average Americans every day on this program. I try to be a voice
for the voiceless and I`ll continue to do so. Anybody from the Baltimore
sun want to go face-to-face with me on this program in a respectful way, I
would like to do it.

Coming up, a new report on the disgrace at Penn State. Shocking
details about what coach Joe Paterno knew and why he protected a pedophile
for years. We`ll be right back.

(COMMERCIAL BREAK)

SCHULTZ: And finally tonight, one of America`s most revered
institutions is admitting it didn`t do enough to stop a serial child
predator. Former FBI director, Louis Freeh, released a blistering report
on Penn State University today. Freeh accused Penn State of protecting the
image while it allowed an assistant football coach to repeatedly rape young
boys.

LOUIS FREEH, PENN STATE INVESTIGATOR: Our most saddening and sobering
finding is the total disregard for the safety and welfare of Sandusky`s
child victims by the most senior leaders at Penn State. The most powerful
men at Penn State failed to take any steps for 14 years to protect the
children who Sandusky victimized.

(END VIDEO CLIP)

SCHULTZ: Freeh says coach Joe Paterno and university administrators
first suspected Sandusky back in 1998. Sandusky was convicted last month
of sexually abusing ten different boys. Penn State says it accepts full
responsibility.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Our hearts remain heavy and we are deeply ashamed.

UNIDENTIFIED MALE: I too was horrified when I learned of the Sandusky
allegations last year.

UNIDENTIFIED FEMALE: We were horrified. We`re saddened. We are --
there are not enough superlative words to use.

(END VIDEO CLIP)

SCHULTZ: The trustees all say coach Joe Paterno lied to them. But
they don`t want us to judge Joe Paterno for his mistakes. ESPN`s Matt
Millan agrees.

MATT MILLAN, ESPN: You can`t discount all the good that he`s done.
And you have to - I guess the biggest thing is to get a little perspective
here because he`s still a guy. He`s still a man. He still has flaws. And
this was one of them. This decision right here was a major flow.

(END VIDEO CLIP)

SCHULTZ: Coach Paterno insisted this is not a football scandal. But
the fans might not agree after today.

I`m joined tonight by William Rhoden, columnist from "The New York
Times." A lot to take apart here. How does Penn State recover from this?

WILLIAM C. RHODEN, COLUMNIST, NEW YORK TIMES: This is such an awful
night. And if you are a Penn State fan and a big college football fan, you
have to start ask asking yourself the question, what is it that I`m
watching? This is a total abuse of power. That`s for the institution, not
just Penn State, but the entire big time college institution where the
coach is the most powerful and most well compensated person on campus.

This stuff has got to stop. And not only do we have to focus on Penn
State, but Joe Paterno is dead. What do we need that we`re going to find
out five, ten years from ago about the incredible institution of big time
caused athletics.

And if you listen to the comments, the board of trustees should hand
in their collective resignations on us. They should all resign. Because
one of the things that the report said is they did not create an
environment of accountability. So, you know, spare me with all the fellows
that hard to hit. I don`t care about that. Everybody`s heart is heavy.

SCHULTZ: How do they recover? Five programs in the history of the
NCAA have had the death penalty. In football it was SMU for a couple of
years. Would that help Penn State?

RHODEN: Well, you know what, they should - and you know, I`m not even
concerned about helping Penn State. The damage that institution has done
and the cover ups, I don`t care about Penn State, but the death penalty at
the very least. And Ed, remember last year when they had an opportunity to
not play the last game? You know, it was so important to get that last
game to sweep. That`s the problem.

SCHULTZ: They knew how bad it was then and they went on and played
the game. Warren Sapp tweeted out today that they should take down
Paterno`s statue. Do you have any thoughts on that?

RHODEN: Again, it`s there. That`s - in Russia, when you are going to
take me (INAUDIBLE). I mean, you know, it`s there -- I`m looking for
moving the forward. That`s not going to get us where we need to get.
Let`s put the program on probation. Let`s give them the death penalty.
But this is beyond just NCA. This is criminal. This is criminal.

MADDOW: Start somewhere. I will check in with Mr. (INAUDIBLE) if you
think that is going to be enough.

SCHULTZ: All right.

MADDOW: All right. Thank you, Ed.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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